Nuvama Wealth Management Ltd (NSE: NUVAMA) Q3 2026 Earnings Call dated Jan. 27, 2026
Corporate Participants:
Ashish Kehair — MD and CEO
Bharat Kalsi — CFO & Head of Strategy
Analysts:
Unidentified Participant — Analyst
Manas Agrawal — Analyst
Prayesh Jain — Analyst
Dipanjan Ghosh — Analyst
Mohit Mangal — Analyst
Nidhesh Jain — Analyst
Lalit Deo — Analyst
Sanketh Godha — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Nuwama Wealth Management Limited Q3 FY26 earnings conference call. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded. I will now hand the conference over t o Mr. Ashish Kaher, MD and CEO for opening remarks. Thank you. And over to you sir.
Ashish Kehair — MD and CEO
Thank you. Good morning. Good morning everyone and thank you for joining us today. I wish you all a very Happy and Healthy 2026 today. As usual, I have with me Bharat as Group CFO and the SGA team our investor Relations advisors. We’ll walk you through the performance for the quarter, discuss the key drivers of our results across the segments and then also share a bit of strategic outlook for the period ahead. We can then jump to the Q and A section starting with the summary of the results. I think we continue to build on our growth momentum supported by the core businesses which are our strategic priorities.
We are seeing the benefits of the value proposition built around the exhaustive platform which can basically service the full wallet of the client. And this I think positions us well to continue to capture the growing trends in our industry across the segments in which we operate. Revenues for nine months grew by about 8% and we witnessed growth across most of the segments except the core capital markets which is IB and IE Wealth Asset Services. We saw decent amount of growth and operating profits after tax for nine months was about 780 crores. Coming to a bit of outlook on the market I think while the global conditions remain challenging, it’s generally extremely volatile environment given the geopolitical stance of us.
But domestic growth as there is consensus now should begin to recover the policy support through tax measures. RBI action has improved the credit momentum which should support the gradual recovery in the corporate earnings in the Indian markets. I think with this backdrop the overall capital markets looks to be supportive and with the increasing investor confidence and rising participation is continuously translating into healthier flows. The domestic flows are still strong in the capital markets. Turning to Novama over the last two, three years I think we’ve gone through multiple phases of transformation. Our initial focus subsequent to demerger was to ensure a smooth transition and establishing ourselves as an independent company with our own governance framework, brand, rating and operating systems.
This was followed by listing about 9/4 ago. Since then our focus has been firmly on Driving organic growth across each of the segments and also to unlock synergies across the different segments through what we call one Novama program. I think this approach has worked well till now. Profits have grown by about 45% CAGR over the last three years. Nine months now as I said was 780 compared to nine month FY23 which was about 253 with this scale. We now are also looking at a set of strategic initiatives aimed to drive better value discovery for the company across each of the segments over the near term.
Starting let’s say with asset management business has been historically focused on AIFS and a bit of PMS. We are now expanding this platform to include SIFs. As you are aware we already applied for the mutual fund license and we have the in principal approval only the final approval is pending. Once that is done in the next two to three months we will launch the SIF and it’s just a migration of our existing existing well positioned AIF strategies which we will transition here and I think that gives a significant better value proposition for the client which will then bring about growth.
We are also looking at potential M and A opportunities in this segment. I mean we are open to all kinds of ideas but the primary interest is in alternates where there are managers where they have skill sets of managing money but do not have the platform to raise capital. So we plan to bring some of these underfold if we get decent opportunities in the market. In wealth management I think domestic is doing reasonably well and we have the path well laid out as to how to expand and add capacity and continuously innovate on the product side and invest on the technology side.
I think one major trend which is playing out and which will be visible in the next maybe five, seven years with greater amount of prominence is that client portfolios will have a decent amount of offshore allocation. So our offshore platform build out, we are dialing up and I’ll talk about more when we are talking about the private business and the wealth business and this can also be done through both organic and inorganic groups, asset services and capital markets. Our focus remains on growing our client base and expanding our footprint across different geographies bringing newer clients into India especially in the HFP category and on domestic side on PMS and aif.
And we’ve done significant amount of work on backward integration. Here we are going to add RTA services which is only for PMS and aif. Pretty much most of the things are done and we should be live in the next three months and we will Also add trustee solutions so that it becomes a one stop shop for the domestic PMS and AIF managers and will help us to get significantly higher market share. And lastly our 100 program which we launched in 202324 to accelerate synergies between segments and look at opportunities which can create more value. I think this will evolve.
We’ll continuously assess which segments are most synergistic and how we can organize the businesses to ensure that such synergistic opportunities continue to be leveraged by us. Coming to the key highlights of our business segments for this quarter starting with wealth management and before we go to wealth and private, I think there are two broad trends which we’ve been witnessing. I’ve been talking about this in the previous calls also I think what it makes sense to just distill and talk about the two clear trends which we are seeing and which is going to shape how firms will grow in this business.
One, I think the competitive intensity is growing and at least that’s a validation that we are in the right space. In addition to traditional brokers, we are also seeing several private equity backed platforms that are aggressively building teams. While this competition historically was restricted to ultra high net worth, we are also seeing it now move to the HNI segment and the affluent segment. I think over the long term firms that combine people with an exhaustive platform approach will be best positioned to sustain and win and that will require investments and a lot of patience. I don’t think these businesses can be built overnight.
Second important trend which I am witnessing now is product innovation and availability of size is becoming extremely important and when I say size it basically comes in two components. One is your distribution capability, your reach, your placement capability because that has become a big attraction of getting new product manufacturers to come to you and second, in certain pockets of clients your balance sheet availability. Because India is also moving towards leveraging their investment assets and I think it has become now an integral component if you want to succeed in wealth management business. I think these two are extremely important otherwise it will become difficult even to attract good quality people to come to your platform.
Because as an RM if I join a platform in which I cannot really service my client, I am depleting my value in the long run. So I think these two trends are extremely visible right now. Coming to Numbers Noama wealth let’s start with our strategic priorities which is managed products and investment solutions. We continue to grow this reasonably well. During nine months revenues from MPIs grew by about 48% and closing assets increased by about 30% year on year. This now contributes to 60% of our overall wealth revenues and generated about net new money of 6,500.
So I think we are broadly on track to deliver 28 to 30% of NNM in this coming to lending. I had mentioned about two quarters back that we will now start growing the book. As of end of Q3 our closing book was about 4300 crores compared to 2800crores which was at the beginning of the financial year. So we were able to grow the book by more than 38 39% and NII also grew by about 30% in Q3. On the RM front, as I said that over the last 12 to 15 months we have evolved our strategy and we are given the complexity and the sophistication of clients which we are now handling here.
I think we are migrating the quality upwards. So the number of RMs may not actually reflect the investment which is being made in this segment, but the whole population quality. We are basically changing the orbit to two notches above just to meet our client needs and we continue to invest in our partner business which are external wealth managers. We feel very, very enthused and excited about that whole segment and the growth that brings about. And there is a white space there for non mutual fund distribution where I think we are playing a pioneering role. Nuama Private Starting with ARR, this revenue stream now contributes about 60% and has grown by about 30% year on year for nine months.
FY26 average ARR assets are now about 50,000 crore plus and delivered a blended retention of over 90 basis points. Product pipeline here remains robust. I think we can sustain the growth trajectory. We’ve also strengthened the leadership across our advisory platform which is branded as Infinity. It is basically a combination of discretionary, non discretionary and ria. All three. We’ve increased our leadership strength there around coverage of key clients, fund management and the core advisory team. I think these additions will further help us sharpen the value proposition and grow that part of the book. Quarterly Net New Money may seem a bit moderated here, but there are no structural concerns.
I think we should not look at it quarter to quarter overall full year basis. I think we are broadly on track to deliver 25% growth on the opening assets. On the talent side we continue to attract high quality talent despite significant competition here because as I said, the platform essentially offers a unique value proposition for RMs. I’m confident that if they leverage the full platform, their ability to generate revenues and service the clients significantly Superior to majority of the other platforms that exist in the industry today. Over the last 12 months we’ve added about 10% of the capacity, taking the count to nearly about 150.
We strengthened our teams in Hyderabad, Bangalore and also established new locations Jaipur, Surat and Kanpur. Coming to offshore, our build out in Dubai and Singapore continues to move well. We’ve added incremental capacity in both the locations. We now have established partnerships with multiple banks and asset managers and can offer a full bouquet today both for inbound and outbound customers. The Dubai office has already broken even and we expect Singapore to follow in the next maybe 2/4 or so. And about 5% of our overall private revenues now come from offshore. Moving to asset management Commercial real estate fund the AUM has now reached about 3000 crores as at the end of quarter three and on the deployment front we are already at about 40% and there are few good deals in the pipeline.
Once that is done we should cross 50% comfortably. These are all Maki transactions which have happened. You would have seen the coverage in some of the newspapers. Category A buildings in category A locations, I think they will all end up whenever we exit in some reit and these can have a sustained continuous ownership. So we are thinking of what structure to create to provide exit and still continue to earn on them. And given the fact that we are already at 3040% is deployed, I think in another quarter, maybe quarter and a half, we should be able to mop up another thousand crores and wrap up the full fund at 4000 crores.
On public markets, net flows were subdued primarily three reasons I think volatility has been significant in the public market space over the last 12 months. There were a few scheduled maturities in this segment and I think competition from SIF is also creating an impact which is why we fast forwarded our MF application the minute the SIF rules came and we are hopeful that by quarter one we should be able to launch our SIF subject to the approvals coming in and we will be able to migrate our existing strategies into this and then thereafter I think you will start seeing growth coming back.
Even between Q2 and Q3. I think the growth in the gross flows have come back but because of the scheduled maturity we saw some amount of outflow but it was significantly lesser than what we saw in Q2. So from a trend perspective it is improving. There are two new launches in this segment. We are launching a dynamic asset product which will be an evergreen product and get money from clients across seasons and we are also getting a retinuit product filed which will give clients exposure. We are trying to get a vehicle which can give them exposure to both listed and unlisted spaces and should be able to launch by the end of this quarter.
On private markets, I think right now we are in consolidation phase. We are completing the deployment of the existing fund and also starting to exit some of the older funds. We’ve listed Sunip Pharma, one of the largest positions in one of our earlier funds and there are two, three more listings which are going to happen in the next six to eight months. I think subsequent to that is when we see the volume pickup. So overall, if I were to look at these three strategies and where to look at the next maybe year or so across the three segments because commercial real estate we would have finished deployment and somewhere by the end of Q1 we would have launched our second fund.
So that should contribute to maybe 2 and a half 3000 crores and about 1500 crores should come from public markets and balance between private markets and credit, which we expect to launch again in the next three to four months. So FY27 may be another 7 to 8,000 crores of net new money is what we would target from this. Coming to asset services, revenues grew by about 15% year on year, 9 months and 7% quarter on quarter, which basically shows the recovery of this business subsequent to the loss of large client which had happened in the first week of July, basically at the beginning of quarter two, third quarter, basically we saw meaningful improvement in client assets and float balances.
Our closing float balance in Q3 is now already above Q1 levels and therefore, I mean subject to regulatory situation, remaining the way it is. I think Q4 earnings will be at par with Q1 and we will form a base for again coming back to growth numbers in the next 12 months. In this business we’ve reasonably expanded our client coverage here we are, as I said, going to newer geographies, opening up India to newer set of funds which have not earlier looked at India. And on the domestic side, essentially backward integration of our RT and trustee services will help us increase the market share here.
Coming to core capital markets, institutional equities and investment bank. I think this is where we saw a bit of moderation in the numbers in this also institutional equities was essentially flat between the two quarters and as compared to last year there was a dip because last year in this quarter I think the FNO rules came in the middle of the quarter. So you had half quarter available at higher Volumes. And on the IB side fixed income continues to do well. It was mostly the ECM billing. So while we did the mandates we had the issues.
I think the billing essentially moved from 1/4. So therefore you saw some amount of dip here. As I said fixed income in that part of the business now contributes about 50% and that continues to do well. I think this is it from my side right now. I will hand over to Bharat to cover the financial numbers and then we can jump to Q and A from there. Thank you.
Bharat Kalsi — CFO & Head of Strategy
Good morning everyone and thank you Ashish. Ashish has anyway provided the comprehensive overview on the business environment, strategic initiatives and the broader market context. I did not take much time given we have an hour call. I’ll try and cover the group level financials more in detail. And anyways business level financials Ashish has covered at least touched on almost all key parameters around growth around MPIs, around ARR and strategy around each businesses. So if you look at on the overall financials our consolidated client level assets are now at 4.6 lakh crore which is due to the net new money as well as the mark to market.
On the assets it was 4.35 lakh crore. As at the end of the previous quarter our revenue was at 755 crore. This grew by 4%. And on a nine month basis our revenue is around 2,300 crore which is a growth of around 8%. But I think looking at the total revenue may not be the best way to look at it. We should look at the individual business segments contributions. So like within this growth of 8% on our YoY basis or 4% for the quarter wealth businesses has actually grown by 18%. Now the wealth businesses contributes almost 57% of the total revenue which was almost 50% in the same period last year.
The Q3 of FY25 this was 50%. Now we are at 57%. So we are moving to a wealth becoming one of the largest revenue contributor in the total revenue line. So that is one part. Secondly if you look at from a quarter two perspective versus quarter three there are two elements which I would like to highlight both on the revenue side as well as on the cost side. So if you look at from the revenue side there is a drop of the revenue from 772 to 755 crore. There are two three key components. One ashish anyways covered which was the IB and within that ECM billing which is just maybe a quarter on quarter movement.
That’s one reason wherein the revenue has dropped. And secondly if you look at the private business, the transaction revenue has dropped from 100 crore to 65 crore or so. This is basically in the quarter two we had lot more syndication related transactional revenue which was the way it works is that when you do a transaction the revenue gets booked in the same quarter. So it’s not like there is a structural change, it’s just that you have maybe more deals in quarter two and relatively lesser deals in quarter three. But having said that, our focus on this continues to be strong.
Like we’ll have lot more such deals coming in the coming quarters. This could be led by our commercial real estate fund, other third party credit funds or whenever we launch our our own credit fund we will have similar transactions. So I think looking at a quarter on quarter for transaction revenue in private may not be the best way. And these can obviously have a little lumpy in a quarter. So our trend of next three, four quarter is what I would suggest to look at from a transactional revenue consistency. Those are the two things on the revenue side.
Similarly on the cost side there are two things. One is the new labor code which got enacted on 21st of November. Like everybody in the market, we have also revisited our past service liability and that has led to almost like a 11 crore rupees or one time impact for the better performance measurement. We have actually shown the numbers without the new labor code impact in the data book as well as in the investor deck. But that’s like one time impact of around 11 crore. And secondly you will notice that there is a drop in the variable cost of the businesses which is mainly in the asset services and the capital market.
So now given we are at the end of quarter three, we have lot more visibility as to how the year will end. And hence we have revisited our overall variable bonus for these businesses. And that is where you will see from an incremental provision perspective from a variable cost there is a drop compared to quarter two. But we are very comfortable what we have done it and we are very sure where we will end up at the year. And these numbers seems to be pretty aligned with the bonus philosophy of our company. So to that extent the variable cost has dropped.
I think those are the two unusual chroma revenue as well as cost compared to quarter two. Otherwise all other key prices are working very fine. That is the reason you will see that the total cost shares from a quarter on quarter it has only gone up by it is down by 8% and year on year it is up by 4% on the OPEX side also if you look at the number has moved from 115 to 107 crore. These are just the transaction which has happened in a particular quarter. Nothing specific around here. Our overall guidance in terms of maybe a 10 to 12% growth on the OPEX on a full year still remains intact.
As I mentioned in my previous call out of this 10 12% growth on the OPEX 50% of that so anything around 5 6% will go towards the business expansion like opening up new branches, setting up verticals within businesses and another 4 to 5% will be towards inflation link so your rentals goes up, your AMC goes up. That’s broadly the breakup of 10 to 12% expected cost increase. Those things will continue as we are working on a quarter on quarter basis. Overall cost income ratio is now at 53% and for the nine month it is at 55% PAT.
Anyway we discussed Ashish also covered so the pat is both without labor code it’s at 262 crore which is a 3% quarter on quarter growth but with the labor code impact it is broadly same as what it was in quarter two. I think those are the key numbers. Ashish anyways covered a lot more on the individual businesses and I think we can move to Q and A now given we are left with half an hour. Over to moderator.
Questions and Answers:
operator
Thank you. Ladies and gentlemen. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press Star and two participants are requested to use their handsets while asking a question. Ladies and gentlemen we will wait for a moment while the question queue assembles. We take the first question from the line of Manas Agarwal from Sanford C. Bernstein. Please go ahead.
Manas Agrawal
Hi. Thanks for the opportunity. I wanted an update on the HFT business within the asset services. A how is the activity trending and b your yields have moved up as an offset to Jane street issues. How sustainable is the bump up in yields? So that is 1B wanted an update on the litigation that you’ve talked about in your annual reports in the past with Anagra and see on the PAG situation if you have anything to share. Those are my questions.
Ashish Kehair
So activity perspective on hft I think post the order of Sebi we saw about 3035 days when the market was adjusting to basically understand how the regulator is looking at it.
And then I think regime change also happened somewhere around September and the signals from the regulator were reasonably positive. And their whole discussion around weekly options and all also subdued. So I think activity now is actually back at similar levels or even more and volume is also reflective of that. And newer HFTs have started signing up. So maybe it was a 3040 period of adjustment and then it all came back. Yields manas as we’ve already mentioned earlier also is a function of the split of the collateral between deposits and G Sec and that is not a very simple listing.
It a function of how the overall service is being priced. There is a broking relationship, there’s a custody relationship, there’s a clearing relationship. We are able to operate as a single one stop shop and can give a bundled pricing. Given the size of the clients and how they have looked at the overall pricing. Right now the proportion of deposits should be higher than the seconds the yields have gone up. If you ask me, we can forecast for a 12 month period and in my view it should remain between 2.6, 2.7 to 2.9 kind of range should not migrate much.
Unless we see interest rate movement, significant interest rate movement on either side, minor movements will be absorbed. On Anugra litigation, I think one major step that has happened is that for the last two years, unfortunately whenever the case was coming from hearing, no significant discussion could happen because there were maybe other issues which the Supreme Court was handing which was of higher importance. But this time they have formally admitted the case. Till now the admission itself was going up, down, up, down, formally admitted and I think by in and now the hearing will start. But I don’t think any decision looks to be, you know, to be reached in near future.
It may take a couple of years. But our positioning, our understanding, our assessment of the situation, we are fairly confident that this will be favorable for the company because whatever we did was in accordance with the law. Then on pag, you have any specific question?
Manas Agrawal
No, just wanted to check any change in position. I think in the past you have said that as management there is something that you cannot change. But is there any change in the position?
Ashish Kehair
Not really. I mean as I’ve always maintained that there are financial sponsor and they will, there will be a change of ownership at some point in time.
But at this point in time there is nothing that has changed. I mean in the recent past.
Manas Agrawal
Okay, thank you.
operator
Thank you. We take the next question from the line of Prayesh Jain from Otilal or Financial Services Ltd. Please go ahead.
Prayesh Jain
Hi Ashley Bharat. Just like a few questions. Firstly on Nuvama wealth, you know if I look at the MPIs revenue sequentially they have been flat. You know, you had incremental money coming in from these flows. They should have been equity mark to market positive. Yet the revenues on MPIR appears to be flattish sequentially. So what would you ascribe that to.
Ashish Kehair
See? Basically, composition of the MPIS also matters. Now if you break MPIS into two buckets fresh, there is managed products and there is investment solution. So managed product is your classic aif, mf, PMS and investment solution is your fixed income, mld, insurance and largely unlisted and syndication deals. So if in the investment solution bucket there are certain categories which have different kinds of yields, so your overall flow may not directly correlate in terms of the revenue. Because just to give an example, I mean if you do insurance, the earning is fairly different from what you get if you do fixed income versus mld.
So I think that composition creates a bit of a quarterly variance. But as long as your net new money is on the upward trend, and if you look at the trend of the numbers in MPIs, I don’t think there is any structural concern. There is 11/4 of growth and if you look at a year on year growth, it’s about 48% on nine month basis and 22% on a Q on Q basis, it’s just 3 crores down from previous quarter, which I don’t think merits any concern from a trend perspective.
Prayesh Jain
Generally we’ve been used to seeing consistent growth and that is the reason just pointing that out. The other question was on your asset management piece where you mentioned that there have been challenges to flows given the volatility in markets on the private equity side, on the listed equity side. But is there also a point where because the number of accredited investors is increasing and they are looking to get the smaller ticket size and probably more varied products, is that any cause of concern with respect to incremental flows from an industry perspective.
Ashish Kehair
From the numbers at least what we are seeing. That is not something which we have witnessed as of now. Not really, no. Theoretically what you are saying can have a bearing, but I think it is not visible. In fact, not at all. None of our discussions internally has brought this topic up. In fact, in Novama wealth we were trying to position this to the clients that if they take accredited status they can actually go ahead and do a large number of credit funds at a lower ticket which will give them a much higher diversification. But then what we faced practically on the ground is that the fund managers have a number of investors cap of thousand, I think.
So they don’t really want to encourage this significantly unless they have the ability of launching multiple schemes. So we’ll have to see how that was this whole accredited investors thing.
Prayesh Jain
Got it. And last question on the asset services front where you know we in terms of revenues we still are from the peak of what we had, you know, in say one QFY 26 or even for that matter four QFY 25 when. We had about 198 crores of revenues, we still had about 172 crores. You had kind of alluded to the fact that you will be back to full revenue potential by fourth quarter. Are we on course to do that or probably we’re still running the behind on that. And just an extension to that you mentioned about adding more services here from an RTA perspective. Do you think that that will kind of add to cost in the initial period and then probably help you get better revenues and profitability over the medium term? Yeah, those would be the last questions.
Ashish Kehair
So when you look at the revenue in asset services, one component you earn from float. Right now float related earning has two components, the float balance itself and the yield. So from a float balance perspective we will be back to full potential by end of Q1. But yields have compressed from Q4 and Q1 this year because of the rates going down. So whatever residual impact in the difference in revenue which you will see will be because of the fall in yield. And I think in Q1 maybe once the float goes even further up we will be able to negate the impact of the fall in yield on the services front.
I think large part of the costs are already incurred and these are not very high. Opex Capex, these are more licensed like trustee services do not require a very high amount of expenditure and marginal increase in market share will be able to compensate. So I don’t think there will be any sort of impact which we will see in the numbers which are worth discussing that you know, which we need to highlight at least as of now. We don’t see that.
Prayesh Jain
Great, thank you so much and wish you all the best.
operator
Thank you. We take the next question from the line of Deepanjan Ghosh from Citigroup. Please go ahead.
Dipanjan Ghosh
Hi, good morning sir. So few questions from my side. First on Nirvama Private and Nirvama wealth, if you can give us some color on the gross net new money in recurring assets versus the redemptions so that you know, across let’s say the third quarter or maybe nine months so that we can get some color on how the gross money into the ecosystem has been shaping up. The second question is, you know, in terms of the cost variable cost reduction that we have seen, how comfortable are you on fourth quarter? I mean you give some, I mean Bharat gave some color on the fourth quarter but I mean do you have any more headroom in case let’s say the revenues were to kind of depop it in 4q also and third question is on the IBI business if you can split up the margin profile of the business between dcm, ECM and and your ie and just for clarification I think at the start of the call you give some color on the floor expectations in AMC and FY27.
Did I hear it correctly that you’re expecting around 7,000 to 9,000 crore of flows in that.
Ashish Kehair
Let me go one by one in your gross ARR assets for private I think would be order of magnitude about 40004500 crores for the quarter and net we saw was about 1500, 1800. So balance would be the adjustment in terms of redemption or scheduled maturities and all that. We don’t track ARR non ARR in wealth so that we maybe we will check and when we talk next we can give that number on variable cost. Essentially in this quarter the adjustment was largely around two businesses. One was in Wama Private because in Q2 we saw the revenues go up.
So therefore in line with that the incentive and the bonus provisions went up. And second was in the capital markets business. So in both we have the flexibility to move up and down and broadly we try to track the variable provisions in line with the revenue so that we don’t have a shock in any quarter in fourth quarter it’s not that we will have something unreasonable or large come in which is disproportionate to the revenue percentage. So it should be in line with what we have been seeing till now. And our overall cost income range also should be in line.
It will not be materially different in terms of the margin profile for ECM DCM we’ve not gone to that level because there are a lot of resources which are also common. But broadly if one were to, I mean this is just a guess, I don’t have actual numbers. DCM would be maybe slightly better margin because people cost could be slightly lower than ECM side maybe 1 is at 40, 1 is at 60 and blended we operate at 50 and institutional equity will range from a 50 to 60, 65 range depending on the performance of revenues.
When the revenues go significantly up, the cost income comes down and vice Versa on amc. Yes, you heard right. I can just. And I can tell you broadly how we are looking at the breakup. Essentially if you are able to launch our new commercial real estate fund and do maybe 2,500, 3,000 there and if credit is also launched which we are planning maybe by Q1, latest by Q2 and one could do another to 3000 there. Once we migrate our flagship strategies of current AIF absolute return and long short into SIF, we expect flows to improve because SIF gives us significantly improved tax profile for the customers and our absolute return and long shot still are in the top quartile in terms of performance.
So I think that will start attracting flows and it also opens up a large set of distributors. Maybe we will take time to onboard them because we are not a retail brand but it opens up the 10 lakh distribution IFA community as and when they qualify to distribute the same. So I think combination of these three could essentially give us another two, two and a half thousand. So if we add all this up order of magnitude anywhere between 6507 to 80009000 without taking into private equity, I think that will be an added upside element. That’s how the numbers add up.
Dipanjan Ghosh
Thanks. I just want to follow up on the gross profile. If you can keep the same number for nine months. Thank you. And all the best.
Ashish Kehair
About 15,000 crores. Sorry, 13,000 crores. 13,000 crores.
Dipanjan Ghosh
Thank you, thank you. And all the best.
operator
Thank you. Ladies and gentlemen. If you wish to ask a question please press star and one, we take the next question from the line of Mohit Mangal from Centrum Broking Ltd. Please go ahead.
Mohit Mangal
Yeah, thanks for the opportunity. My first question is towards the Netflix. So I think you know if I look at this quarter so warmer private, you know seen a considerable uptick led by the transactional segment. While wealth has seen a kind of a decline from around 3800 to 3250 odd crores. Now going to financial year 27 how do you see net flows actually spanning out? You know that that would be a first question.
Ashish Kehair
So net flows become important in two things. One, for private we should look at the ARR net flows. ARR net flows this year for private right now is about 9 months basis about 6500 crores and an order of magnitude. It should end up at around anywhere between 23 to 25% of the opening. And let’s say we are right now sitting at about 52,000 crores of assets in ARR. If we end the year at say 54,55 and you take a range of say 20 to 25% of that you’re looking at 10 to 11,000 crores or maybe 12,000 crores next year in Nuama private and if you come to sort of Nuama wealth I think similar about 25 to 30% of the opening book which we will have in the NPIS segment.
So that’s how essentially one should track the netflow numbers.
Mohit Mangal
So that is helpful. My second question is on the cost to income. So I think, I think you’ve guided for 10 to 12% you know increase in OPEX. So does that also cover the, the RM addition that we are doing?
Ashish Kehair
No, no. So when we, when we speak our lingo OPEX means everything else other than people cost. People cost is different. So people cost. I think if I look at a nine month console we would have grown by about 7% year on year and by the end of the year maybe it can be slightly higher. But order magnitude this only OPEX is everything else other than people cost. So there last year we were about 410 crores. I think this year we should end up anywhere between 440 to 445 crores. So that’s the 10% increase is what we talk about.
Mohit Mangal
Okay, understood. This is very clear. And just lastly on basically the RM addition I think we are adding about 10%, you know to our RM strength. So I think this, this strategy will continue right over the next two to three.
Ashish Kehair
Absolutely. Yes, yes. This country.
Mohit Mangal
Right. Thanks a nd wish you all the best.
Ashish Kehair
Thank you.
operator
Thank you. We take the next question from the line of Nadesh from Investec. Please go ahead.
Nidhesh Jain
Thanks for the opportunity. First question is on private wealth. So there is an increase in yield in this quarter. What has led to that increase? And secondly what is the run rate of transactional revenue that we should build in this business?
Ashish Kehair
So yield increase typically happens because of the composition of the products in the ARR basket. Sometimes if the salience of category two will increase slightly because there you earn about 30 odd percent in year one. So that gives a bump up. But on a, on a BAU basis I think any range between 80 to 85 90bps is what we will continue to see there in transactional income broadly this year we should see about 20% growth.
So like last quarter we saw about 110 crores of revenue. This quarter we saw 64 65. I think anywhere between 70, 80 crores is a decent run rate till I mean going forward is what we are.
Nidhesh Jain
Second question is wealth management. Yeah.
Ashish Kehair
Y eah, yeah, go on, go on.
Nidhesh Jain
So on wealth management can you give s ome color on MPIs income? How much of the revenue is upfronted? How much is let’s say trail based etc.
Ashish Kehair
The overall wealth management around 60% comes from MPIs and about say 20% comes from NII and balances your broking and others. And if I look at full wealth management as a bucket around 55% comes from ARR. So if I subtract 20 of NII from there, around 30 35% will come from recurring revenues within the empire’s bucket. So 60 divided by two let’s about 30 to 35% of that 60 breakup. So 20 25% would be upfront and 30 35% would be recurring.
Nidhesh Jain
Understood, Understood. And last question is an asset management in that segment? The yields are quite volatile among segments with private markets, public markets and real estate. So how should we model. So what, what is leading to this volatility in yields and how should we model this?
Ashish Kehair
Actually it’s a temporary this thing in real estate what happens is that every time a new in till the time you close the fund, right. Right now we have reached about 3000 crores as I said, another thousand crores. We will hit the end of the fund and after that the yield with stabilizer. Because every time till the closure when a new investor comes at that point in time in that quarter you charge fees from the beginning.
So in any quarter if let’s say we move from 3,000 to 4,000 in one quarter on that thousand crores in that quarter from the beginning till the till end of quarter four, the full fees will be charged. So Once we hit 4000 on commercial real estate the fees will stabilize which will be order of magnitude 50, 55 basis points. On private equity you can assume it to be around 50:55 basis points. And on public markets the fees have been fairly steady at around 60, 62 basis points.
Nidhesh Jain
Sure. So there will be element of carry also right? In this, in these businesses.
Ashish Kehair
No, right now this is. Right now this is zero carry. As of now we have not taken, we don’t take carry into consideration. We take carry as and when it comes. If we change that policy in the future we will tell you.
Nidhesh Jain
Sure sir. Thank you. Thank you. That’s it for my side.
operator
Thank you. We take the next question from the line of Srinik Mehta from Indo Alps Wealth. Please go ahead.
Unidentified Participant
I just wanted to ask you a. Question about this institutional equity segment. We have been seeing significant declines over the last few quarters. What parameter would you use to Say that there is potentially a bounce back. Whether this is the number of active. Institutional clients or is it the overall. Cash volumes that will help us say that, you know, we will start getting back to a year on year growth.
Ashish Kehair
I think two things. One is the cash volume and second is the derivative volume. These are the two components that essentially once they start moving up and if the market share remains intact, which typically for us remains intact, then you start seeing growth coming back.
Unidentified Participant
Okay, and are you seeing any early signs of it?
Ashish Kehair
Yes, at least in this quarter we have seen quarter on quarter. There is an improvement in the average daily turnover because on a year on year basis Q4 will become full. I think clean quarter where the FNO rules, if you remember came middle of Q3 last year.
So half of Q3 had higher numbers in FNO volumes and then it sort of subdued and Q4 onwards you get a base which is with the new FNO rules. So this Q4 will be the first quarter with. So I think you should see a year on year uptick start happening because the base effect will come into action.
Unidentified Participant
Okay, thank you.
operator
Thank you. We take the next question from the line of Lalit Mohan Dev from Aquarius Securities. Please go ahead.
Lalit Deo
Yeah. Hi sir. Good morning. So there’s two questions. The first one, the lending book we. Are writing that we have seen some strong growth in the wealth business where. We have scale it up to 4300 crores. So now how should we say this for the next year. And similarly in the private also like where we are at around close to around 24 retirement crores. So how should we see overall loan b ook.
Ashish Kehair
Ideally we love to grow it in line with the business. So anywhere between 20 to 30% is what we will target for next year.
Lalit Deo
And so just like we have also highlighted, we also touched upon this advisory piece in the Nuama Private which is where infinity. So like so current. What is like the overall current Aum over there and like how should we see this in respect to the distribution business in the ultra H nice segment.
Ashish Kehair
I think right now we are not separately disclosing. It’s a part of the ARR Aum. We are also discussing internally on whether to call it out separately. So give us a couple of quarters and maybe we can give you the numbers. But it’s growing significantly within the arra.
operator
Thank you. We take the next question from the line of Sanket Goda from Avendes Park. Please go ahead.
Sanketh Godha
Thank you for the opportunity. Probably the question on asset services still remain to me because if I look at one QF25 your yield or retention was 1.4 percentage. Now it is more than double of that 2.88. So. So just to understand this model really works on retention or. Or is it you, you. You calculate a growth number how much you want to achieve from the clients and. And then accordingly you rebalance the cash and defect component so that incrementally revenue doesn’t fall. Whether building a model around the yield is actually right or how do we understand this way to look at this business.
Ashish Kehair
So I think what you’re saying is quite pertinent actually. Last year in Q1 we had the large client. Right now the large client was disproportionately large as compared to others. So therefore there was an adjustment. And actually the answer to both your approaches is a yes. That is the challenge that if somebody becomes very large then the correlation with yield will fall off because then you will target a growth and adjust the cash and non cash securities. But if they are all within a particular range then I think the yield works which is the case right now.
So I don’t see this breaking suddenly in the near future and should be in the range of 2.6 to 2.9% in terms of the yield on the clearing balance. Now why it was 1.4 and becomes 2.9 is how that clearing balance is split between cash and G Sec. Which what you said was absolutely right that if somebody becomes very big and they want to reduce the cash then we will have to target a growth and therefore adjust accordingly. But I don’t think for the next 12 to 24 months we have to model for that. We don’t see any kind.
Sanketh Godha
So incrementally 2.6 to 2.8 kind of a number is a realistic number to build in.
Ashish Kehair
Yes, yes, yes that’s right.
Sanketh Godha
Understood. And maybe. Maybe for the first time asset clearing revenue grew so. So which means whatever migration need to happen from. From insta to wealth or even the default which will happen from the large client. Now we assume this growth to come back kind of a thing in the assets under clearing.
Ashish Kehair
Correct? Correct. That’s right. That’s right.
Sanketh Godha
Okay okay. And lastly just just want to check this. This is an came out with a paper that on. On. On fiis knitting is allowed.
Ashish Kehair
That’s only for cash buckets for derivatives anyways Derivatives margin based business. So doesn’t matter.
Sanketh Godha
But in this revenue we. We don’t make any significant fun from the cash.
Ashish Kehair
No no no. Cash related float is insignificant.
Sanketh Godha
Okay, understood. And lastly Ashish is On on the floor number. I. I know I asked this question typically that, that, that you gave a guidance of. Of around 20,000 crores for the year. Closer to 20,000 crores and now we are at 14 odd thousand crores. So we need to get closer to 5,800 to 6,000 crores for the fourth quarter to achieve that number. And you are seeing a growth of 20 to 30% on that number for the next year. So just wanted to understand given the two core pieces I.e. private and wealth saw a sequential decline.
QQ means your confidence on diluting 20k kind of a number of. Is there any macro factor because. Because market sentiments have weakened meaningfully in last maybe two weeks, maybe three four weeks or one one and a half month. Then, then your interact rn interacting with the clients. How, how do you see whether. Whether the money will come or they are waiting and watching something. Any color on those will be very useful to understand.
Ashish Kehair
So largely around the product calendar or the products which you have which are non correlated to equity markets is what gives us the confidence to be in line with that number. Because equity flows are equity flows they will always keep moving at least in the higher net worth segment and ultra high net worth segment. They are not as I would say consistent as the SIP retail flows but the non equity component which is your alternate fixed income MLD’s and within alternates different categories. There you see reasonable degree of certainty and there if you have a product calendar which is descent then you have a reasonable amount of control.
I will never say 100% predictability on where the flows will be but reasonable amount of control on the flows.
Sanketh Godha
So Ashit in the current year around 19 20k and next year around 26k net flow number is achievable in your view?
Ashish Kehair
Yeah. So about 1920k and next year between 25 to 26 is what we target here.
Sanketh Godha
Understood. That’s it for me sir. Thanks. Thanks.
Ashish Kehair
Thank you.
operator
Thank you Ladies and gentlemen, if we take the last question from the line of Amar from Radon Capital, please go ahead.
Unidentified Participant
Hello, I’m audible sir.
Ashish Kehair
Yes.
Unidentified Participant
Hello.
Ashish Kehair
Yes, you’re audible.
Unidentified Participant
Yeah. Can you just give me a summary for the FY27 guidance overall and the new launches and products that you’ll be introducing to FY27.
Ashish Kehair
So we don’t normally give guidance on revenue and PAT numbers but what we say is that we aspire to have a 20% plus growth and this year because of the adjustment of asset services we will not end up at that. But I think once the base is formed, we should come back to that same level of growth. Anywhere between 20 to 25% of the overall business. That’s what we target.
I don’t think we give any guidance in terms of new products, at least on the asset management side. There’s a dynamic asset fund. There’s a REIT in with fund. There will be a credit fund, there will be a new commercial real estate fund. These four we have visibility currently. Okay, and what will be the percentage of revenues, if you could help me with that, for the new launches. So these are all asset management products. So they will run at a management fee structure of, you know, anywhere between one and a half to 175, 1.75%, which gets split between the asset management and the wealth management businesses in terms of distribution and management fee.
And then there’ll be some carry, but each product will have a different structure. Okay, so that’s helpful. Thank you so much. Yeah. Yeah.
operator
Thank you, ladies and gentlemen. With that, we conclude the question and answer session. I now hand the conference over to the management for their closing comments.
Ashish Kehair
Thank you. Thank you all for coming back again. Hope to see you again in the next quarter. Thank you.
Bharat Kalsi
Thank you.
operator
Thank you on behalf of Nuwama Wealth Management limited that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.